Blog - Management speak

Co-sourcing and the quest for greater profitability

In the drive for greater profitability, is co-sourcing a viable option for law firms, asks Maxine Park?

Outsourcing remains a popular option to help improve efficiency, but is co-sourcing now a better choice for law firms? docstockmedia

One of the immediate reactions to the economic slowdown for many law firms was the reduction in support staff, as most sought to address a decline in profitability through greater efficiency. Outsourcing remains a popular option to help improve efficiency, but is co-sourcing now a better choice for law firms? Despite optimism returning to the UK economy, law firms appear hesitant to recruit, beyond lateral hires and the need for new fee earners. Outsourcing some business processes has allowed firms to concentrate resources on fee-earning activities, which has increased efficiency and profitability. But this has ensured many will be slow to replace their in-house support services, if at all.

Sensitive services

The benefits of outsourcing, are broadly understood by the legal sector, but many firms are still reluctant to transfer sensitive services to external providers. Some of whom employ hundreds of anonymous individuals, possibly spread all around the globe, which can cause real problems for UK-based law firms. It is this apparent lack of control over the process that has made many firms nervous of seeking external support. Firms have instead chosen to pursue innovative processes and technologies that allow them to adapt their business quickly to fluctuating work levels and the constantly changing business environment.

Co-sourcing relies on service providers creating dedicated teams within their own organisation to undertake the work for each specific client, working as an extension of the firm’s remaining office function, rather than as a completely outsourced substitute, with little or no contact. Firms considering adopting this innovative approach, will often have accepted the benefits of outsourcing business processes, but may worry the quality and level of service delivered will not match that of in-house support services, despite the potentially significant cost savings.

Co-sourcing, mixing internal and external resources to deliver services more efficiently, is becoming an increasingly attractive alternative to straightforward outsourcing and clearly cost is a major consideration. Firms that reduced their in-house secretarial resources to a level able to cope with the reduced work levels experienced throughout the recession, are now finding they do not have the necessary capacity to cope with upturn. Co-sourcing secretarial services ensures these firms have the necessary resources to cope with peaks in demand, without recruiting additional overheads to the pay roll. This delivers a guaranteed minimum service level, whilst avoiding the need to pay underused secretaries, when the firm experiences an inevitable trough. Many firms also find they can switch some in-house resources from pure secretarial support into fee-earning activities.

Many service providers will have built their offering based almost entirely on the outsourcing model, but law firms in particular require a level of confidentiality, work tracking and control that has helped shape a new co-sourcing solution. Experienced UK-based secretaries, often working from home, are granted access to the firm’s system to undertake remote typing on the client’s case or document management system. Developing a co-sourcing solution for clients, will involve external typists spending time on-site at a firm’s offices to ensure each member of the team is familiar with the system and is trained in the unique working methods of the firm and its business ethos. This level of understanding ensures work is undertaken quickly and efficiently to complement the in-house resources, as if they were sat in the office.

The services available to firms now extend beyond simple transcription and copy typing, to include Land Registry searches, file opening, data input, document production along with work in the usual Microsoft Office programmes, Word, Excel, PowerPoint, Visio and others. Whilst the advantages for the firm are numerous, paying only for the working time of the team members, not holidays, sick days, office chats and coffee breaks is a major consideration. Some firms will undoubtedly switch to a co-sourced approach to cut the office space needed, particularly in high-rent city centre locations.

The co-sourcing solution also makes evening and weekend support available to fee-earners quickly and easily, with all the necessary security and confidentiality compliance measures in place. Choosing ISO 27001 accredited service providers, registered with the Information Commissioner's Office (ICO), ensures there are no compliance issues, unlike when office staff have to take work home on a memory stick to meet pressing deadlines.The use of dedicated co-sourcing teams, allows law firms to feel confident as they did pre-recession, safe in the knowledge they have the resources they need to help deliver the high quality service demanded by their clients, whilst driving the efficiencies that help them remain competitive.

Despite optimism over the economy, the legal sector faces a challenging future and it is now perhaps time for lawyers to remember they went into business to offer legal advice, not support a multitude of peripheral in-house services.

Maxine Park  founded DictateNow whcih specialises in rpoviding digital dictation and transcription services. She qualified as a solicitor, specialising in commercial litigation and was made partner at her firm in 1992.


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20 May 2014

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